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PF Contribution by employer

Tax queries 6378 views 5 replies

Dear All,

 

Please inform me whether the contribution made by employer to PF of an employee is required to be shown as income and deduction in Form 16 to be issued to the employee in case the contribution is within the limit of 12%. e.g. if an employee earns a gross salary of Rs.300000/- p.a. and contributes Rs.36000/- to PF (12%) and the employer also contributes Rs.36000/-(12%) as his contribution.  In such a case, whether his Form 16 will show his income at Rs.336000 (300000 Gross Salary + 36000 contributed by the employer to PF) and show deduction u/s 80-C of Rs.72000 (Rs.36000 contributed by him and Rs.36000 contributed by the employer) OR Income at Rs.300000 and deduction under Section 80-C at Rs.36000. 

Replies (5)

Employer contribution to PF upto 12 % is not included in salary income and the employers contribution not quilyfy for deduction U/S 80 C

Thus In your case Gross salary Income is Rs 3 Lakhs and deduction U/S 80C Rs 36,000/-

therefore Taxable salry Rs 2,64,000/-

Dear Atul,

In above case can you please tell that what will happen about Rs. 36000 (Employer's contribution). Means where it will be accounted for?

Is it directly exempted from Income Tax?

Please reply.

Thanks

Purushottam smiley

employer contribution is claimed as expenditure subject to payment of contribution with in due date

Employer's Contribution Treated as Exp if paid in with in due date as per  respective Act. 

Employee's Contribution Treated as Income If is not paid with in due dates as per respective Act. .

 

 

Providend Fund Employer Contribution under which group


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